NASHVILLE, Tenn. (WKRN) — If you are a state worker, K-12 teacher, or thinking about school vouchers, new state budget plans outlined Thursday will affect you.
Tennessee House and Senate finance committee members digested a lot of detail Thursday about Governor Bill Lee’s plan to balance the current state budget and the one next year because of lost tax revenue from businesses shut down by COVID-19 precautions.
“We are glad to see Tennessee businesses getting back to work, getting back to work safely but its still yet to be seen what the shape, speed and scale this recovery will be,” the governor’s Finance Commissioner Butch Eley said Thursday before the Senate finance committee.
That means a huge uncertainty like never before in putting together state budgets for things like education, the state’s Medicaid program TennCare, and public safety.
The state of Tennessee gets over sixty percent of its funding from sales taxes, but a lot of businesses collecting the revenue were shut down because of the coronavirus.
“April as you can see shows the bottom drop out,” said Commissioner Eley before the Senate finance committee members.
What lawmakers must approve first are patches to the shortfall of revenue in the current fiscal 2020 state budget.
Hiring freezes of state workers and purchases, along with reserves will help close the books, but the next year’s fiscal 2021 budget includes removing teacher pay increases.
“Salary increases that were scheduled to go into effect July 1,” said David Thurman who oversees the state budget process.
Senate Democrat leader Jeff Yarbro questioned proposals from Republican Governor Lee still in the new budget plans like school vouchers or ESAs (Education Savings Accounts) for Nashville and Memphis.
“The governor’s ESA or the tax cuts that we talked about last week we are leaving those off the table,” pointed out Sen. Yarbro before the finance committee.
Reductions to cover an estimated budget shortfall of up one-point-five billion dollars include:
- 12% reductions in all departments
- Reductions in new building projects at places like public universities
- State employee buyouts
- Using more state reserves
The Lee administration says the plan does not affect K-12 education funding and state worker health insurance.